In an announcement made on Monday, FedEx Freight revealed its plans to close 29 locations later this year and initiate a new round of furloughs for certain employees starting at the end of May.
FedEx Freight intends to close the specified locations and consolidate its operations into other facilities, effective from August 13. Regarding the specific locations that are slated for closure, a FedEx spokesperson stated that the company currently does not have the information available to share.
In a statement, FedEx expressed its commitment to consistently evaluating its network in order to adapt to evolving market dynamics. As part of this ongoing process, the company identified opportunities to consolidate operations in various locations. The objective is to enhance customer service, streamline processes, and reduce costs by minimizing touchpoints. FedEx emphasized that assisting affected team members in finding alternative open positions is a top priority whenever feasible.
These recent announcements from FedEx regarding the closure and consolidation of locations occur shortly after the company’s announcement of a phased transition to consolidate various operating companies into Federal Express Corporation. It is important to note that while this consolidation affects FedEx Express, FedEx Ground, FedEx Services, and other operating companies, FedEx Freight will remain a separate entity and continue offering its specialized services in less-than-truckload freight transportation.
FedEx Freight specializes in handling bulk shipping, considering any shipment weighing more than 150 pounds as freight, as per the company’s guidelines. With approximately 400 service centers and a workforce of 46,000 team members, FedEx Freight plays a significant role in the industry.
The upcoming round of furloughs for certain job classes at FedEx Freight is scheduled to commence on May 28. The company stated that eligible employees will be provided with opportunities for permanent transfers to other markets where there are hiring needs. Furthermore, furloughed employees will retain their health benefits during this period.
FedEx clarified that the furloughs implemented at FedEx Freight are temporary workforce adjustments, and all furloughed employees will be recalled on or before August 25, 2023. The company emphasized that it is maintaining its operations as usual, ensuring the provision of essential services that customers rely on.
In response to a decline in demand, FedEx Freight had previously announced an initial round of furloughs in November, followed by a second round in February. However, the company did not provide specific details regarding the number of workers affected by the previous instances of furloughs.
Although FedEx did not disclose the exact number of employees affected on Monday, a spokesperson informed The Commercial Appeal that the impact would be minimal, affecting only a small percentage of the total workforce at FedEx Freight (FXF).
In response to declining demand and high operating costs, FedEx is persistently implementing cost-cutting measures. The logistics giant seeks to achieve greater savings amid a series of disappointing quarterly earnings reports.
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